Companies embark on projects every year in every department, most typically in sales and marketing. These projects can range drastically in scope and scale, from launching a new product line to improving existing operational procedures for greater cost-efficiency.

The problem that many companies face when implementing new projects and deriving benefits from them is the lack of an effective strategy that aligns all their projects under a single banner.

As a result, they spend millions or even billions of dollars on projects that don’t actually fit the vision of the company or fulfill its goals. All this money, time, and energy is completely wasted. Countless projects are shut down without warning or are otherwise forced to limp on in a kind of limbo, never brought to the finish line as they bleed company resources dry.

Companies that don’t have an effective business strategy and don’t prioritize project management lose out big in the end. A survey in 2018 by the Project Management Institute (PMI) revealed that on a global scale, these organizations waste around $1 million every 20 seconds. That adds up to about $2 trillion per year.

Think about that number for a second. Two trillion dollars, completely down the drain. All because companies aren’t aligning their projects with an overarching business strategy.

In this article, I’ll discuss the importance of having a business strategy, the various purposes of projects, and how to close the gap between the two.

What Is a Business Strategy?

As a company, you have certain goals. These can be large-scale or small-scale, but in the context of business strategy, we’re referring to the goals you have for your company as a whole, not department by department.

To reach your large-scale, company-wide goals, you must have a business strategy. This is your roadmap or guidebook that you will always refer back to stay on track.

For example, if your current goal for your company is to expand your target demographic from adults in their 30s and 40s to young adults in their teens and 20s, your strategy will always be centered around that. It will involve all your different departments, from R&D to sales to marketing, working together to achieve this one thing: expand the target demographic to teens and 20-somethings.

Having a business strategy is absolutely critical. Not only does it keep your company united on all fronts and help you reach your goals faster, but it can help you in one other critical area. It can help you decide which projects to invest in, and which ones to send back to the drawing board before they take a single cent out of your bottom line.

I explain how later in the article, but first, it’s important that I lay out a clear definition for “projects” and show you how they differ from your business strategy.

What Is a Project?

A lot of people confuse project management with strategy.

While projects do help a company achieve the overarching purpose of the business strategy – in fact, that should always be one of the primary objectives of the project – they do so on a micro scale, not company-wide.

Projects also come with stricter timelines than a business strategy. Obviously, it can take a long time to implement a strategy, and depending on how lofty the goals are, the end date is not always clearly defined.

That’s why you need projects, as these are small, actionable goals that will make achieving the large-scale ones much more realistic.

To illustrate what a project is and what it entails, let’s say that in your efforts to gain a new audience of teens and twenty-year-old’s, you decide that your digital marketing department needs to expand its current efforts onto new social media platforms. You decide that your marketing team needs to develop, present, and embark on a plan for establishing a TikTok account and a certain number of views or followers by the end of the 2nd quarter.

What you’ve just created is a project. It has a start date, a deadline, and a result.

You’ll have dozens if not hundreds of projects like this throughout the year. Most companies have a budget that they dedicate to just these sorts of expenditures. Chances are, you’ll have a few that will fail through no fault of your own or your team’s. But the chances will be greater if you don’t have a business strategy.

Why is that? Allow me to explain.

The Gap Between Projects And Strategy

Without an effective, well-thought-out business strategy that informs all your company’s projects, your project budget is at high risk of running you out of thousands of dollars (or millions of dollars, if you own a large enterprise or corporation). Either you’re going to exceed your limits due to lack of oversight, or your resources are going to be so inefficiently used that you receive no ROI by the project’s end.

All of this will happen because there is a gap between your projects and your business strategy.

Why does this gap exist? Here are a few common reasons.

  • A lack of communication between departments, between project managers and CEOs, and between employees and their supervisors.
  • A lack of vision across the entire company. No one in the lower levels of the company hierarchy knows what the company’s goals are, what their strategy is, or what the projects they’ve been told to work on are for.
  • A lack of business strategy. The company is just floundering around without a roadmap or a guidebook. Confused and unable to identify what projects will provide the ROI they seek; they instead pour money into whatever ideas seem good at the time.
  • A lack of clearly defined goals. Without goals for the future, a company is truly and totally lost.

Do any of these reasons sound familiar? If so, then you know you must address them before you can close the gap between projects and strategy. We’ll show you how to accomplish that feat below.

How To Close The Projects And Strategy Gap

When you’re ready to align your projects with your business strategy, here are some tactics to follow.

1.   Keeping The Projects that Will Advance Your Business Strategy

This tactic may sound obvious when you say it out loud, but sometimes it’s the obvious answers that are the most overlooked.

Keep the projects that will advance your business strategy and shut down the ones that won’t.

To decide which projects fall into the “keep” category and which ones go in the “throw-away” category, assemble a team and look over your current slate of projects. (Yes, this counts as starting a new project, but it’s okay because the purpose of it is to align all the others with your business strategy.)

Next, ask yourself and your team: which projects directly advance your overall business strategy? Which ones are primed to provide an ROI that will help you meet your company’s goals? Write all of them down on a list.

Now, take all the other projects and go through them one by one. Are they adding anything to your company? Are they aligning with your strategy? If the answer is, “No” on any of them, consider shutting them down completely so you can redirect those resources to more profitable outlets.

Streamline your projects down to the point where you only keep the ones that are helping you open. The others are time wasters and money sinkers. They need to go in the trash bin.

2.   Analyze Each New Project Through A Strategy Lens

Whenever someone in your company or you yourself proposes a new project, huddle up with your team and analyze the project through a strategy lens. See how the budget, the start date, the resources, the deadline, and the result line up with your business strategy. If it doesn’t contribute to the cause, that’s a sign that it’s time to go back to the drawing board.

3.   Keep Everyone In Your Company Informed And Aware Of Your Goals

Projects often bottleneck midway because the staff members who are carrying them out are unaware of what their ultimate goal is.

If employees who are working on a project are not putting their best foot forward or directing their time and energy to the right places, it could simply be because they don’t know what they’re doing or why. They’re just blindly following the orders of their project manager, who in turn may be blindly following the orders of their department head, and so on.

It’s wise to keep all your staff members, from the lowest-paid intern to the CFO, informed about and aware of your business’s goals. Whether you share the details of those goals and how you plan to reach them company-wide with everyone is up to you. But for the sake of morale, as well as guiding your staff members’ focus, give your employees an outline of what your company is trying to achieve and remind them that they’re making it happen through their efforts, however big or small they may appear.

4.   Use AI To Predict Future Projects’ Performance

Artificial intelligence technology has progressed to the point that it is now helping companies predict the solvency of certain aspects of their business strategy. This includes predicting the future performance of certain projects.

With enough data, AI prediction software will enable you to determine the feasibility and profitability of a project before you even put wheels to the ground.

Conclusion

The gap between projects and strategy is costing organizations around a total of $2 trillion per year, as of 2020. This is emblematic of just how much money can be lost to pointless projects that don’t align with your business strategy or meet your company goals.

By closing that gap, you’ll save thousands if not millions of dollars a year and be able to redirect those resources to projects that will actually produce a tangible ROI.

I entered the online gaming space in 2006-2007, another high-risk enterprise, as an investor. It began with a promise of a top-end poker site with our own software, poised to be the next partypoker.com – the world’s number one poker site at that time with an $8B market cap on the LSE. Our poker site was to be an apt mimic for a reprisal of that same business model.

When things did not materialize for over a year, I had to step in to interfere in that enterprise; to move from an investor to an active CEO. That was the first strategy.

I also realized strategy-wise, that the B2C offering that was taking too long to be built (3 years before us pumping in funds and one year after) – had lost the plot and the initiative. Too late to launch is a thing, too. Kinda lost in translation and efficacy. I closed down most of the underperforming units spread across the globe and eating my money. Firing spree. Strategy two.

I pivoted the company from a b2c poker website to a b2b gaming software enterprise, turning a commission-based price model to a royalty and revshare-based one. That initiated a whole new set of projects to kickstart and align with this core strategy that I ushered in.

There were loads of other projects that had to simultaneously be launched, that involved merging, buying of companies, revamping the product, viable, path-breaking marketing, and loads of others; they were all aligned with the core strategy of the master pivot.

And it worked. From the world’s foremost wannabe poker site, we seamlessly – albeit with a lot of effort and juggling – switched to a pretty successful “gaming software provider”.

Aniket Warty

Aniket Warty

Adventure Capitalist. The creation of wealth is merely an extension of my innate freedom to produce.

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